I completely disagree with you. There certainly is a market for a larger-format device (A4 screen would be logical), but it's a different market to the one the Sony Reader and friends are intended for.

Yes, that's what I said. It is a distinct market, a market with potential, so why are we not seeing movement/development

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I think myself that the market for fiction reading is enormously larger than the academic market. Compare the number of fiction books sold to the number of textbooks!

Whilst quantity is certainly in important factor, it doesn't define the usefulness and therefore market potential of each niche.

To me, there is little benefit to spending $400 dollars on a reading device just for reading fiction books; books that would cost the same as pbooks, books that I may have to spend time converting formats and such. I have no need for a device that can store hundreds of fiction books, because I read only one at a time. The most I'd need is the amount I could fit in a corner of my suitcase. To me it is neither cost effective nor time effective. You might disagree (in fact I expect flames), but I'd challenge you to put yourself in the shoes of an average reader who may read a book a week and only has a small grasp of computers and try to justify the expense of an ereader and 'hassle' that goes with it. (I know, that 'hassle' is the fun part for some).

However, as a student, the literature I read is free (after journal subscriptions are paid of course) so cost of e-books aren't a problem. And, to hell with the cost of the reader, I'm thousands in debt already. If it help me get a first class honors, then it's cost effective. And if it were powerful enough to replace my computer? then hell yeah! Also, I need to read many books concurrently, so the ability of an ebook device would prove essential (no more walking round campus with a bag that weighs a ton). The books I read aren't available next to the bestsellers at the local bookstore, so it would be of benefit to me to find hard to find titles on the internet. Anyways, the list goes on..

Point is, whilst maybe 1 in 100 fiction book readers would find a ereader useful, pretty much all students would, as well as teachers, professors etc. So the markets are comparable imo.

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Would you pay $1200 for an A4 screen?

YES!

ETA; I remember hearing about a study done to show the difference between learning from books and a computer. It showed that those studying from a computer screen showed much less recall and comprehension. I'd be interested to see a similar study comparing computer to EInk, with books as a control.